Good afternoon and thank you Catherine for that great introduction. I’m always glad to be back in Toronto and also to see so many of you who share my passion for celebrating and deepening the U.S.-Canada relationship.
I want especially to thank Mark Fisher and the Council of the Great Lakes Region for all their work in setting up this important forum. I’d also like to thank Her Honour, the Lieutenant Governor of Ontario Elizabeth Dowdeswell for coming today. It is indeed an honour to have you here.
I recall that last year about this time we were in my home city of Chicago — also home, as the President recently noted, to the Stanley Cup … Now, while we will know shortly whether the Cup finds a new home this year, wherever it ends up, we can all look to the Cup finals as another excellent example of the benefits that come from our robust cross-border trade, whether in goods, services, or players.
All kidding aside, last month, I had the privilege to be at the White House as President Obama hosted Prime Minister Trudeau’s official visit to the United States. I don’t have to tell you what a big deal this was, as the first official visit for a Canadian prime minister in almost 20 years and only the 10th State Dinner the president has held during his time in office.
One of my favorite moments was when we were on the Truman Balcony at the White House as the president, prime minister and their families interacted. There was such a strong sense of common purpose and warmth of feeling — it was truly remarkable. All of which, of course, goes to show that the strength of the U.S. – Canada relationship is as good as it has ever been.
In my meetings and speeches all around this amazing country, I always point to the magnitude of our trade relationship:
- US$671 billion in goods and services last year
- Over $700 billion in bilateral investment
- 400,000 cross-border visits each day
I could go on, but one thing that I want to point out is how crucial a role the Great Lakes region plays in producing those astounding figures.
You see, our two countries have flourished in large part because of this tremendous geographic area. From trappers and traders to farmers and businesses, to industry and high-tech manufacturing, the Great Lakes region has been at the heart of our continued economic prosperity.
Again, the figures speak for themselves:
- $5.8 trillion in GDP — more than a quarter of our countries’ total combined economic output.
- If it stood alone, this region would be the third largest economy in the world.
- The region is the source of 46 million jobs — nearly one-third of our combined workforce. And it is home to an increasingly diversified economy.
- On the U.S. side, the Great Lakes states account for roughly one-quarter of all U.S. exports.
- On this side, Ontario and Quebec account for nearly three-quarters of Canadian exports.
Quite simply, no other economic region comes close.
Following the prime minister’s meeting with the president in March, we came away with several successes and some items for our shared action list that will help us take this relationship to the next level.
Our leaders agreed to improve the way our shared border functions. We will do this by expanding programs to expedite the secure and legitimate travel of goods and services.
We agreed to implement the 2015 Pre-Clearance Agreement and to expand operations at additional sites in Canada. We already have pre-clearance operations at eight Canadian airports (more than any other country in the world, by the way) and now, I’m pleased to say that once the agreement is fully implemented, we will bring this program to four new sites, including Billy Bishop Airport right here in Toronto and Quebec City’s airport. Also, for the first time, we will expand to two rail lines: Montreal Central Station and the Rocky Mountaineer.
As I said, pre-clearance allows travellers to be cleared in advance of arrival to the United States, making for fewer delays at the point of arrival and giving travellers greater access to more cities in the United States. It simply makes sense to expand the program.
Another great program that simply makes sense is NEXUS. It’s a program to speed up border crossings for low-risk, pre-approved travellers into Canada and the United States. The Canada Border Services Agency and U.S. Customs and Border Protection jointly administer the program. More than 1.3 million people have NEXUS cards and I hope you are one of them. People who travel frequently across the border tell me it is one of the most important cards in their wallets — and for some people, it is the most important card in their wallets! We asked Canadians who don’t yet have a NEXUS card to tell us what had prevented them from getting one. A fair number said they didn’t know about the program or didn’t know how it would benefit them. I urge you to look into it! NEXUS not only saves valuable time for travellers, but also for our immigration and customs enforcement officials who can better focus their resources on high-risk travellers.
And speaking of risks, unfortunately they are out there. Although we have agreed to expedite legitimate travel, we are committed to doing so in a way that protects the security of all our citizens. That is why the United States and Canada will expand our high level of border and law enforcement cooperation by exchanging more information about travellers. We have agreed to share our respective No-Fly lists and to complete the last phases of our coordinated entry/exit system. This system will record travellers’ land and air entries into and out of our respective countries, so we have better records of the movements of travellers who may pose a threat.
Our work to ensure safe and legitimate travel also extends to the Great Lakes themselves through a unique program called Shiprider. Under Shiprider, we have U.S. and Canadian law enforcement officers operating on vessels in our shared waterways. Imagine — in the recent past, before Shiprider, a border official in the United States or in Canada, RCMP or Coast Guard, had to discontinue pursuit of a bad guy who crossed the maritime border and got away. With Shiprider, the pursuit can continue right across the border, and last year it produced results contributing to keep(ing) both our countries safe. We have three of our four Shiprider units right here in the Great Lakes region: Detroit/Windsor, Niagara and Kingston/Alexandria Bay. The program has been so well received that we anticipate adding a fifth Shiprider unit in Victoria/Port Angeles this summer to complement our unit in Bellingham, Washington/Surrey, B.C.
Shiprider is a great example of our two countries thinking beyond traditional ways of doing business and using an innovative approach to solve a persistent problem. Shiprider seems like a simple solution, but believe me it took serious commitment and hard work by both our federal governments — ultimately (it) was well worth it. We need more of these innovative ideas to advance the flow of people and goods across our border.
Imagine the advances we could make if we take a fresh look at travel across our border. At the end of February, the State Department, the U.S. Department of Homeland Security and Global Affairs Canada co-sponsored a Cross-Border Hackathon – where computer programmers, software developers, government workers, academics and project managers work to solve a problem, with 23 teams in Chicago and here in Toronto. All the groups focused on streamlining the paperwork involved with cross-border trade. The winning app “TradeSherpa” walks exporters through invoices, government forms and other documents, and can match them with customs brokers. This hackathon was a great way to bring the power of innovation to bear on a specific and persistent problem.
Along this line, the Government of Canada recently announced the launch of its Travel Smart app. This app gives travellers real-time information on border wait times as well as entry/exit requirements, passport validity and emergency contact information for Canadian embassies and consulates around the world — again, a great, innovative application of technology to facilitate cross-border travel.
As you can tell, I am crazy about the U.S.-Canada relationship, but I want to ensure that aspects of the relationship don’t drive our citizens crazy. Our two countries share the most highly integrated supply chains in the world. We inhibit our ability to benefit fully from this integration when small regulatory differences — well-intentioned as they might be — put sand in the gears of our economic engine. I think we can all agree that regulations protecting our health, safety and environment are important and necessary. What often happens, however, is that our regulatory agencies set out to accomplish similar outcomes but come up with slightly different regulations. These differences can mean that companies need to go through two sets of testing, obtain two sets of approvals, produce two sets of labels, or even produce slightly different products altogether, if they want to sell into both markets.
Let me give you a few examples:
- It costs an estimated $150,000 more to get approval to introduce a lipstick with SPF into Canada than into the United States because Canada classifies Sun Protection Factor additives as a drug, whereas the United States does not.
- Energy efficiency labeling for appliances appears on both U.S. and Canadian brands. Both have four main items displayed on the label, but they vary on the type of information displayed and efficiency calculations.
There can certainly be good reasons for different regulations, standards, or labels. But where we share virtually identical regulatory goals, we need to enhance our regulatory cooperation to make sure we’re not imposing unnecessary costs on businesses and consumers simply to comply with different regulations that seek to accomplish the same result. We need to get away from what I call “the narcissism of small differences” that inhibits our cross-border trade.
One of the ways the United States and Canada have been doing this is through the Regulatory Cooperation Council (RCC). The RCC has a simple goal: To align our regulations in areas where our standards and health and safety goals are already very similar. In doing so, we save our companies and our regulators time and money, which in turn results in benefits to consumers.
The RCC’s next meeting is set for May 4-5 in Washington, D.C. That meeting will bring together U.S. and Canadian regulators, business leaders and other stakeholders to discuss areas where we can make near and mid-term alignments to regulatory processes in sectors as diverse as transportation, the environment, health, food and agriculture. If you are able to attend or know of people or businesses who would be interested, I encourage you to check it out. Today, I call to all who participate to think boldly, out of the box ideas
Canada and the United States not only trade together, we build things together. Our closely integrated manufacturing, financial, and services sectors make it natural for our governments to seek and implement agreements that open trade and provide preferential access not only within North America, but around the world.
NAFTA was instrumental in helping us develop more integrated supply chains and create a more dynamic North American platform. But friends, NAFTA is now more than 20 years old. We need an agreement that reflects today’s global economic realities and takes advantage of new opportunities.
And that is just what we have with the Trans-Pacific Partnership.
In the U.S.-Canada context, the TPP represents the modernization of NAFTA. It contains the first-ever chapter focused on the needs of small and medium businesses; it enhances environmental standards and extends them to other TPP partner countries; it improves the transparency of regulations; and it codifies and extends labor rights to partner countries. TPP also tackles issues surrounding the digital economy, express shipments and cross-border data flows.
And did I mention that TPP will give us unprecedented access to some of the fastest growing markets in the Asia-Pacific? All told, TPP countries comprise nearly 40 per cent of the global economy with a population of more than 800 million. The importance of this agreement cannot be overstated. It’s a game-changer that will help our countries succeed in a rapidly evolving global economy.
The United States and Canada, along with our other 10 TPP partner nations, signed the agreement in New Zealand in February. And the Obama Administration is working hard with Congress to pass this transformational trade agreement.
One of the things I love about my job as ambassador is seeing the direct impact of our unprecedented economic relationship first hand. In my travels across Canada, I am very much aware of the importance of our economic relationship for our respective economies. Our success isn’t measured just in the trade in goods and services. Our cross border investments are the ties that really bind together our economic fortunes.
Cross-border investment creates jobs and economic growth that benefit citizens on both sides of the border. Our shared stock of investment totals nearly $700 billion. Canada is the United States’ fourth largest source of foreign direct investment, and I’d like to see Canada move up on that ranking.
So in June I’m going to lead a delegation of Canadian firms to Washington, D.C., for the SelectUSA Summit. The Summit last year was a tremendous success. Canada had the second-largest delegation, with more than 80 Canadian representatives. The Summit attracted more than 1,300 company representatives from around the world, in addition to President Obama, seven U.S. cabinet secretaries, and more than 45 U.S. ambassadors. I am hoping for an even larger turnout for this year’s event. In fact, I’ve been travelling around the country meeting with business leaders and promoting SelectUSA, because it really is a significant opportunity to meet with people that can help facilitate your USA expansion.
Now for many Canadian SMEs — small and medium sized enterprises — the first and logical step into a foreign market is to go south of the border to the United States. And that is what is so special about Select USA: The Summit brings large and small companies from around the world together with state and local economic development teams from the United States, all highlighting the advantages of expanding business into the United States. SelectUSA is not about Canadian companies moving to the United States; it is about the opportunity for expansion into the United States. I would encourage all of you here to talk to my commerce teams in Toronto and Ottawa about joining our SelectUSA delegation. Don’t miss this opportunity!
Our two countries not only trade, invest and make things together, as neighbours, we share the same bounty of natural resources. The Great Lakes are nature’s gift to both our countries. And the United States and Canada fully recognize that we need to do our best to protect this shared natural treasure. The United States and Canada have signed more than 40 agreements to manage and protect the Great Lakes and our other shared waterways. One of the key agreements has been the International Joint Commission (IJC) established under the U.S.-Canada Boundary Waters Treaty of 1909. For more than 100 years, the IJC has been successful in helping the United States and Canadian governments avoid or resolve disputes over shared waters.
Our shared responsibilities to manage and protect the Great Lakes date back to 1972, when the Great Lakes Water Quality Agreement was first signed. In 2012, the agreement was updated to address emerging environmental issues such as habitat protection, invasive aquatic species, and of course the effects of climate change. In February, United States and Canada committed to adopt a binational phosphorus reduction target of 40 per cent for Lake Erie, to combat harmful algal blooms.
All this goes to show that both our countries have demonstrated time and again a willingness and commitment to address pressing environmental issues. We need that shared commitment and spirit of cooperation now more than ever to take on climate change.
A key outcome from the prime minister’s visit to Washington was a plan to reduce greenhouse gas emissions and to develop clean energy. Our leaders committed to significantly reduce methane emissions, phase down hydrofluorocarbons, and agree to a market-based mechanism to limit carbon emissions from international aviation through technological advancements as well as through carbon offsets.
The scale and consequences of climate change are such that governmental regulatory action is only part of the solution. We also need to ramp up our investment in innovative, clean technology to address the challenge of climate change and transition to a low-carbon future.
The governments of the United States and Canada, along with 18 other like-minded partners, will seek to double investment in clean energy research and development by 2020 through a program known as Mission Innovation. This is exactly the type of initiative we need to develop transformational clean energy technology over the coming years.
Now, governments don’t possess the resources to develop these new technologies on their own. The private sector and the investment community will need to make significant commitments as well. And this is already happening. Also, over the last year, a total of 154 companies, representing more than $4.2 trillion in annual revenue, have signed the American Business Act on Climate Pledge to reduce emissions, increase low-carbon investments, and use more clean technology.
Addressing climate change is a significant challenge, but it also represents a significant economic opportunity and is an area where U.S. and Canadian businesses and investors can put our unique drive and innovation to work enhancing our shared prosperity. In 2015 alone, U.S. and Canadian firms invested a combined $60 billion in clean technology, more than all of Europe and the second largest amount of such investment outside China.
So, whether we are working jointly to ensure the environmental health of the region, cooperating to expedite the safe and efficient transport of goods and services across our shared border, or developing innovative approaches to the challenges of our time, the Great Lakes region will continue to play a central role in U.S. and Canadian prosperity. I think President Obama put it best in his Rose Garden remarks with Prime Minister Trudeau when he said, “In terms of our interests, our values, how we approach the world, few countries match up the way the United States and Canada do…when it comes to the central challenges that we face, our two nations are more closely aligned than ever.”